Maharashtra set to get more low-cost homes

The state government has cleared the decks for implementing 20% reservation for affordable homes in all major private projects.

The state government has cleared the decks for implementing 20% reservation for affordable homes in all major private projects.

Nearly a year after chief minister Prithviraj Chavan announced this decision, in a bid to increase housing stock for middle and lower income groups, the final notification is expected to be issued early next month.

The draft notification was issued last year and has since gone through the process of suggestions and objections being heard. It has been learnt some changes will be made to the draft based on inputs from the stakeholders.

The scheme will make it mandatory for developers to reserve 20% of built-up area for constructing smaller apartments — in the range of 300 to 516 sq feet — in their projects. These flats will be bought at construction cost by Maharashtra Housing and Area Development Authority and sold through lottery.

With MHADA left with no land to construct such houses, this decision will make way for the much-needed affordable homes in the city and the metropolitan region.

While the draft notification stated the scheme will be applicable to projects built plots larger than 2,000 sq metres, the government is considering making it mandatory for larger projects of around 4,000 sq m.

"Some changes have been proposed in the draft to make the scheme viable, as developers have been complaining it will increase the cost of other flats. They made a suggestion that instead of paying as per ready reckoner rates, the state should buy them at district schedule rates (DSR) issued by the public works department," said a senior urban development department official.

PWD issues a standard chart of rates for raw materials required for construction projects, such as cement, bricks, sand etc, for every district as per availability. Ready reckoner refers to price of land decided by the government for a specific area — these rates are generally far lower than the actual market value.

"The land cost is borne by builders, so even if we pay as PWD DSR, which is below market value, it is still profitable to the state," the official added.